economic assignment 14

First Economic Assignment

Economy of Starbucks Coffee and Folgers Coffee

Plot the Starbucks graph using 10 cups of coffee for Q and $20.00 for P as point A (equilibrium).

Plot the Folgers Coffee graph using 10 cups of coffee for Q and $10.00 for P as point A (equilibrium).

-Determine which goods are normal and inferior goods.

Supply and Demand

1) Hurricane destroys coffee bean farms, thus decreasing production by 2 cups of

coffee.

2) Recession hits California, hence income decreases thereby increasing/decreasing

consumption by 2 cups of coffee.

3) Which market(s) is/are experiencing a market failure?

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